Ukraine's latest proposal to exchange GDP-linked warrants for new bonds is "significantly more attractive" to creditors than previous options and is likely to receive "a high level of support" among holders, according to a strategic analysis from Citi, UNN reports.
Details
On Monday, Kyiv published a new proposal, seeking to exchange $2.6 billion in GDP warrants for new "C"-type bonds. This is a critically important step for Ukraine to emerge from the debt default caused by the 2022 Russian invasion.
Citi's emerging markets strategist, Nikola Apostolov, noted that the new terms are significantly better, and the "C"-type bonds offer a return value almost 15 points higher compared to previous proposals.
We consider the "C" bond package significantly more attractive and expect a high level of interest among warrant holders.
The government proposed exchanging warrants for international bonds with a rising interest rate and up to $180 million in upfront cash payment, subject to swift adoption and broad support. Holders who vote for the deal will receive "C" series bonds, while those who do not voluntarily exchange will receive bonds from the existing "B" series.
Apostolov added that the new bonds will have additional benefits:.
The new bonds, as we understand it, will be senior to the older A and B series and will have significant downside protection in the event of any default, establishing a floor for their value.
Currently, a key group of creditors has stated that they cannot yet support the plan but are continuing negotiations with the government.
Debt Restructuring: Ukraine says its GDP warrant exchange plan is the best04.12.25, 20:42